Houston — A group of Republican US senators pressed the Federal Energy Regulatory Commission on Tuesday to speed up the permitting of pending LNG export projects and sought details about the resources the agency has available to accomplish that task.
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The market has been eagerly awaiting clarity on how many of the more than a dozen developers currently seeking authorization to build terminals on the Atlantic, Pacific and Gulf coasts will move forward with their projects.
Because the regulatory process is a key part of those decisions, the Trump administration and GOP-led Congress have been pressing federal agencies to move faster. FERC Chairman Kevin McIntyre addressed a Senate committee in June, agreeing that timely permit processing was important to American energy goals. A letter from eight senators to McIntyre suggests the matter should be made a priority.
"We are pleased that you and the other commissioners share our dedication to making sure that the second wave of US LNG export project applications moves forward in a timely manner," the senators wrote. "We look forward to continuing to work closely with the commission to meet that objective."
The senators asked about staffing resources at the commission. Among other things, they want to know what steps FERC is taking to make sure there are sufficient staff and consultants available to expeditiously complete the review of pending project applications. They also asked how FERC plans to work with other state and federal agencies to ensure that their participation is timely and constructive and that their reviews are conducted concurrently.
"What criteria are used to determine the order in which LNG projects receive scheduling orders?" the senators asked. "How will FERC ensure that all applications move forward simultaneously, especially when considering some of the larger, time-intensive applications currently under review by the commission?"
The letter was signed by Senators Bill Cassidy and John Kennedy of Louisiana, John Barrasso of Wyoming, Ted Cruz of Texas, Cory Gardner of Colorado, James Inhofe of Oklahoma, James Risch of Idaho and Lisa Murkowski of Alaska.
Last month, McIntyre offered hints on one step FERC would soon be taking: a memorandum of understanding with the Pipeline and Hazardous Materials Safety Administration.
Both agencies promised the agreement would shorten the review process for proposed LNG facilities.
At FERC 's open meeting July 19, McIntyre said FERC staff has engaged in successful discussions with PHMSA about "new collaborative procedures" that will be implemented imminently and which would "significantly reduce the time required to review LNG project applications by taking full advantage of the expertise of our federal partners at PHMSA ... to study potential impacts as to public safety of each and every LNG proposal."
He described the collaboration as part of FERC's effort to improve the permitting process, increase efficiency and look for ways to eliminate duplication.
PHMSA and FERC share some jurisdiction over safety at LNG terminals. PHMSA 's role grew out of its oversight of pressurized vessels to cover gas in pressurized situations such as in LNG plants. Both agencies have safety inspection teams that attend to LNG facilities.
Also, FERC has been working with the departments of Energy and Transportation to improve coordination. And it is taking a hard look at its own processes to find efficiencies, while working to hire more LNG engineers and to farm more out to third-party contractors.
Even if the issues are worked out, regulatory concerns aren't the only hurdles facing the second wave of US LNG projects.
Many have had difficulty securing long-term contracts with buyers of their capacity to finance construction of their terminals. As a result, there is uncertainty about how much additional US export capacity will be realized after the crop of terminals currently under construction comes online. Besides difficulty inking contracts with buyers, the market also could be affected by the escalation of international trade disputes.
-- Harry Weber, Harry.Weber@spglobal.com
-- Edited by Christopher Newkumet, email@example.com
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